The Consumer Confidence Index, compiled by "Globes" with PwC Israel, rose in November, for the second successive month after several months during which it fell steeply. The index put on 2.3 points in November to 79.4 points (1996=100 points), after rising 13.9 points in October and falling 1.3 points in September.
It is important to point out that the monthly survey, carried out on our behalf by the Rafi Smith institute, was conducted this time immediately after the announcement of a cease-fire with Hamas in Gaza. The public probably did not have enough time to digest the consequences for the economy of the period of conflict and the cease-fire.
The three core question we examine in the survey are:
1. What in your opinion is the current state of the economy?
2. What will be the state of the economy in six months' time?
3. What will your personal economic position be in six months' time?
For each question, we take the proportion of optimists, deduct the proportion of pessimists, and thus obtain what is called "the net balance of optimism". If, for example, 40% of the respondents in the survey estimate that their situation will be better in six months' time, and 50% estimate that it will be worse, the net balance is ten percentage points.
The economy in the future
In November, as in October, a substantial rise was recorded in optimism on the part of the public about the state of the economy in the near future (six months hence). The net balance rose by 10.6 percentage points to minus 21.6 percentage points, after a rise of 13.7 percentage points in October, and a fall of 1.8 percentage points in September.
The rise in this component explains the rise in the index for November. As far as the other two components are concerned estimates of the current state of the economy, and personal expectations pessimism had the upper hand in November. This did not however entirely offset the optimism about the state of the economy in the future, so that the index recorded a rise in November.
Personal future
Although consumers have maintained a net balance of optimism when it comes to the question of their personal economic future, the balance for November is lower than it was in October. The balance fell by 1.8 percentage points in November, after a 3.6 percentage point rise in October, and an 8.2 point fall in September.
The net balance, once more, measures the gap between the proportions of optimistic and pessimistic respondents. In absolute terms, the proportion of optimists about their personal economic future fell from 19.1% in October to 17.8% in November. Conversely, the proportion of pessimists rose slightly, from 15.5% in October, to 16% in November. As always, most people think that their personal economic situations will not change. Their proportion was 58.6% in November, which is similar to the previous month's figure.
How did the picture look earlier in 2012? In two words: more optimistic. In the first third of the year, the proportion of optimists was in the range of 20-23% of respondents, while the proportion of pessimists was 15-16%.
Published by Globes [online], Israel business news - www.globes-online.com - on December 5, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012